'Almost Every German City Is Now On The Verge Of Bankruptcy'
Germany’s cities are on the verge of a massive financial crisis, with the mayor of Essen warning that the data shows that almost every single city in the country is nearly bankrupt.
Currently, the total deficit for all German cities in 2025 is €30 billion, which jumped from last year’s deficit of €24 billion.
Essen’s Mayor Thomas Kufen (CDU), who is also a member of the CDU federal executive board, is sounding the alarm: “Almost every German city is now on the verge of bankruptcy.”
In North Rhine-Westphalia alone, only 10 out of 396 cities and municipalities can present a balanced budget, and these alarming figures from Germany’s largest federal state can be applied to the “entire country,” he said.
Mayor Kufen stressed that the crisis is universal, affecting municipalities regardless of their location: “What’s new is that all cities have their backs against the wall,” he told Bild newspaper.
He warned that “budget freezes would now have to be imposed everywhere,” including in many cities previously considered wealthy.
Kufen emphasized the need for a national discussion on affordability: “We have to talk about what we can do so that our welfare state itself does not become a social case. This means: What do we want to afford and what else can we afford?”
However, he noted that cities cannot make these crucial decisions themselves; only the federal government can
Kufen illustrated the crisis with figures from his own city, Essen, which has a population of nearly 600,000. The city had planned a balanced budget for 2025. “But instead of a slight increase of €1.7 million, we currently have a deficit of €123 million,” he calculated.
Once again, refugee accommodation and integration are near the top of the list for reasons why the city is seeing a budget shortfall. Far from being a solution to Germany’s budget and pension crisis, they have become a massive financial burden for the country, costing at least €50 billion a year in social integration, housing, and benefits.
However, there are also many more hidden costs to mass immigration, including rising housing prices, healthcare costs, education costs for an increasingly foreign student population, and housing a huge number of foreigners in German prisons and psychiatric institutions. Just like Essen, even major cities like Berlin are seeing “spiraling costs” due to mass immigration, leading to large-scale debt required to keep the cities running.
Some research studies have indicated that the overall cost of immigration has already cost Germany trillions and could reach €20 trillion if migration numbers do not fall.
Kufen points to education and social spending as burdens on his city as well, and in many ways, foreigners here also account for huge costs.
For example, official statistics from Essen indicate there are approximately 22,730 primary school students enrolled in Essen, and out of these, about 5,565 are classified as “Not German,” making up roughly 24.5 percent of primary school students in the city. If this definition is expanded to those with an “immigration background,” then the figure increases to 35 percent.
As with states and cities across the country, the non-German student population has, in general, been a massive budget burden, as these students need extra integration courses and more money per student to compensate for educational deficits.
When it comes to social spending, approximately 63 percent of all welfare recipients in Germany are foreigners or have a foreign background, despite being a much smaller share of the population.
In regard to Essen, there are also increased personnel costs due to a public sector tariff increase.
As a consequence, Kufen had to impose “restrictive household management” in Essen. This means the city is essentially only paying what is legally required, such as social assistance and wages. For all other expenses over €5,000, “you need an extra permit from the treasurer.”
Summarizing the situation, Kufen said, “There’s not much left.”
Addressing the federal government’s gigantic debt package intended to help cities, Kufen explained that Essen will receive €335 million over the next 12 years, equating to “just 28 million per year.”
He argued this is insufficient because the funding is primarily intended to finance construction projects. In Essen, that would “with luck be enough for two and a half schools,” Kufen said, noting that “costs have exploded, especially when it comes to construction.”
Kufen made it clear he doesn’t want to sound “ungrateful.”
“We’re happy to take the money. But if someone thinks that Berlin or Düsseldorf will solve all my problems, all I can say is: It will help alleviate them, but we still have a lot to struggle with.”
The mayor stressed that what cities truly need is “not just the money for investments, but simply less bureaucracy, easier awards, fewer requirements so that I can end up doing more with the little money.”
He also warned that if the state cannot function, then democracy is under threat, saying: “Because that’s where citizens find out whether the state works. Whether I can get a daycare place or whether the street lamps come on at night. If you can no longer do all of this, the people who pay taxes get the impression that politicians are not dealing with it properly. And that’s dangerous.”
It is not just the government either, with data showing that residents in Essen are taking on more and more personal debt due to rising rents, electricity, and even food prices, which have risen further in recent months.
The number of people who have taken on so much debt that they cannot pay it back has risen for the first time in six years as well, reaching 5.7 million people who are defined as “over-indebted.” The report also warns that this trend is expected to worsen due to rising unemployment.
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